ACCT 20051/20077: Practical and written assessment

ACCT 20051/20077: Practical and written assessment

Due date:	7 September 2015	ASSESSMENT
Weighting:	20%	Part B

NO SIMILARITY, PLEASE FOLLOW THE FORMAT AND MARKING CRITERIA FOR THE ASSIGNMENT AND SUITABLE

REFERENCING

Objectives

This assessment item relates to the course learning outcomes 1, 2, 3, and 4.

Details

The assignment must be completed as an individual assignment. There is no specific writing style required such as a report or an essay for answering the questions in Part B. Please do not repeat the question in your answer, and simply provide the question number in your answer, for example:

Question 1: Profitability

(a) ROA:

The assignment is based on the actual results for a prescribed selected company listed on the Australian Stock Exchange (ASX). Students should use the annual reports for the financial years ending 30 June 2014, 2013 and 2012. Students may also review commentaries written by industry analysts that provide critical analysis on various aspects of the selected company’s operating performance, financial position, cash flow and strategies.

Students are not allowed to either directly or indirectly contact the company for which annual reports are used in this assignment. Students are also not allowed to contact analysts directly or indirectly to gather information and/or advice about this assignment. Students must base their analyses purely on the information that is provided on the company’s website and/or on the Australian Stock Exchange.

In all your calculations, show the absolute figures from the financial statements. Also support any arguments with absolute figures from the financial statements.

Retain a copy of your assignment for your records.

Don’t:

· Spend time unnecessarily paraphrasing any information provided in the course material and textbooks.

· Just simply identify and mention the issue. You need to elaborate on it, explain exactly what you mean and justify your arguments where appropriate.

Allocation of marks

Please use the marking criteria sheet as a guideline for how marks will be allocated. You will note that no marks are allocated for referencing as it is not expected that you do research in this assignment. However, if you choose to support your answer(s) with using the work of others, please ensure that you use the correct referencing style as stated in the Course Profile.

Formatting

Please keep in mind that marking is done in soft copy, hence allocating marks for the formatting. To obtain these marks, ensure you comply with the following:

· Font: Time New Roman, 12 point, 1.5 line spacing

· Document submitted onto Moodle must be in Word format, allowing the marker to use track-changes to provide comments and indicate where you received marks. Please do not submit a pdf document or copy from another source such as for example include screen shots of calculations done in excel. The track-changes function cannot be used to do the marking in these and hence only information created in Word will be marked.

· Page: portrait orientation

· Footer: Your full name and student ID, page number and number of pages (i.e. Pat Bird s0123456, page 1 of 3)

· Marking criteria sheet is completed and attached as the first page of the assignment.

Please note: 3 marks are allocated for complying with formatting and submission requirements.

Assignment questions

Use the annual reports of McPherson’s Limitedhttp://www.mcphersons.com.au for the years ending 30 June 2014, 2013 and 2012 in answering the questions below. Please use the restated figures provided in the most recent annual reports. You must use the ratios and formulae given in chapter 8 of the prescribed textbook. Show all the formulae and absolute figures used in calculating all the ratios. You do not have to show any graphs to illustrate trends in the ratios. Show ALL your calculations. You will note marks are provided for correct figures. Partial marks can only be provided if you provide your workings and the marker can identify where you went wrong in the calculations.

For questions 1 to 4 below, calculate the two relevant ratios from 2012 to 2014:

Question 1: Profitability analysis (6 marks)

(a) Return on assets

(b) Net profit margin

Question 2: Asset efficiency (6 marks)

(a) Days inventory

(b) Days debtors

Question 3: Liquidity (6 marks)

(a) Current ratio

(b) Quick ratio

Question 4: Capital structure (6 marks)

(a) Debt to Equity ratio

(b) Debt ratio

Question 5 (Word limit: maximum 250 words) (8 marks)

Explain what each of the eight ratios in questions 1 to 4 above reflect or measure. In other words, what does each of these ratios tell us about the performance, position and operations of an entity.

Question 6 (Word limit: maximum 250 words) (12 marks)

Analyse the trends from 2012 to 2014 in all eight ratios you calculated in questions 1 to 4 above and discuss whether each of the eight ratios has improved or deteriorated. Please do not state if the ratio has increased or decreased but state if it has improved or deteriorated. Also provide two reasons for the change in each of the eight ratios.

Question 7 (Word limit: maximum 600 words) (13 marks)

Based on your calculations in questions 1 to 4 above and your answers to questions 5 and 6, would you buy shares (invest) in McPherson’s Ltd? Justify your answer by discussing each of the following categories separately:

(a) Profitability

(b) Asset efficiency

(c) Liquidity

(d) Capital structure

Conclude at the end of each category if you would invest in McPherson’s based on the particular category. Then make an overall decision if you would invest in McPherson’s Ltd.

	Student name	Student ID
Marking Criteria Sheet: ACCT20051 and ACCT20077	Marks available	Marks awarded
Questions
1 Profitability analysis: (3 marks for each ratio, 1 mark per year for correct figures) · Return on assets · Net profit margin	6
2 Asset efficiency: (3 marks for each ratio, 1 mark per year for correct figures) · Days inventory · Days debtors	6
3 Liquidity: (3 marks for each ratio, 1 mark per year for correct figures) · Current ratio · Quick ratio	6
4 Capital structure: (3 marks for each ratio, 1 mark per year for correct figures) · Debt to Equity ratio · Debt ratio	6
5 Explanation of what each ratio reflects or measures: 1 mark for each ratio	8
6 Discussion of trends in ratios of McPherson’s Ltd · 0.5 mark for each ratio stating if it improved or deteriorated · 0.5 mark per reason for change of each ratio (1 mark max per ratio)	12
7 Decision to buy shares in McPherson’s Ltd: Commenting on · Profitability analysis (3 marks) · Asset efficiency (3 marks) · Liquidity (3 marks) · Capital structure (3 marks) · Overall decision (0.5 mark) with justification (0.5 mark)	13
Formatting and submission requirements	3
Assignment Total marks	60
Assignment Total out of 20 marks	20